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EXHIBIT 10.16
AGREEMENT
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THIS AGREEMENT (the "Agreement") made this 11th day of March, 1999
among (1) XXXX X. XXXXXXXX AND XXXXXX X. XXXXXXXX (collectively referred to as
"Xxxxxxxx") and (2) ASSOCIATED ESTATES REALTY CORPORATION (an Ohio corporation),
ASSOCIATED ESTATES MANAGEMENT COMPANY (an Ohio corporation), and all of their
respective subsidiaries, divisions, and/or affiliates (collectively referred to
as "The Company").
RECITALS
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WHEREAS, The Company manages the following properties owned by entities
in which Xxxxxxxx and members of their family own all or substantial interests:
Eton Collection-Cambridge Court ("Eton-Cambridge"); Garfield Mall ("Garfield");
Mound Building ("Mound"); Parkway I Business Plaza ("Parkway I"); Parkway
Business Plaza II ("Parkway II"), Envoy Condominiums ("Envoy"), Shaker Club
Condominiums ("Shaker Club"); Devonshire Apartments ("Devonshire"); Franklin
House Apartments ("Franklin"); and Brookview Commons Apartments ("Brookview");
the foregoing properties are sometimes referred to individually in this
Agreement as a "Property" and collectively as the "Properties";
WHEREAS, certain disputes have arisen between Xxxxxxxx and The Company
concerning the management of the Properties by The Company;
WHEREAS, Xxxxxxxx. Associated Estates Corporation (a corporation in
which Xxxxxxxx and members of their family own 95% of the common stock) and The
Company are simultaneously entering into an agreement concerning the resolution
of certain disputes arising out of the management of certain government assisted
apartment projects managed by The Company in which Associated Estates
Corporation is or was a general partner (the "Government Assisted Properties
Agreement"): and
WHEREAS, this Agreement is being entered in conjunction with the
overall resolution of certain disputes between Xxxxxxxx and The Company,
including without limitation the matters concerning the Properties as provided
in this Agreement,
NOW THEREFORE, in consideration of their mutual promises made in this
Agreement, and for other valuable consideration. receipt of which is hereby
acknowledged by each party, the parties, intending to be legally bound, hereby
agree as follows:
1. REPRESENTATIONS AND WARRANTIES. As an inducement to Xxxxxxxx to
enter into this Agreement, the Company represents and warrants to Xxxxxxxx as
follows:
A. The Company has not made any advances on behalf of the
Properties that have not been repaid.
B. Except for Eton-Cambridge, ("Eton-Cambridge Advance
Interest"), all interest payable on prior advances made by The Company on behalf
of any of the Properties have been paid in full.
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C. The total Eton-Cambridge Advance Interest owed by Eton
Square Limited Partnership ("Eton") (the partnership that owns Eton-Cambridge)
as of March 11, 1999 is $320,000.
D. The Company further represents and warrants that the
amounts shown in the columns headed "Adjusted Cash Balance 01/22/99" and "Net
Interest Due (to) from Mgmt Company as of 12/31/98" in attached Schedule A are
true and accurate to the best of The Company's knowledge and information as at
2/23/99.
2. COMPANY COVENANTS. The Company hereby agrees that Xxxxxxxx shall
have the opportunity and right to review and approve all budgets for each of the
Properties in advance of the adoption or issuance of such budget. The Company
further agrees to manage each of the Properties for which it has management
responsibilities in accordance with the applicable approved budget, and to
provide written notice to Xxxxxxxx in advance of incurring any expense or
obligation that causes a negative variance in any approved budget line-item in
excess of $2,500. The Company further agrees to protect, defend, indemnify and
hold harmless Xxxxxxxx from any and all obligations, claims, liabilities, or
damages, including attorneys' fees, arising out of any failure by the Company to
abide by the agreements regarding budgets contained in this paragraph 2.
3. PAYMENTS. On or before March 12, 1999, Xxxxxxxx shall provide
funding to enable Eton to pay Associates Estates Management Company ("AEMC") the
sum of $320,000 which represents the Eton-Cambridge Advance Interest through
March 11, 1999.
4. CERTAIN MANAGEMENT CONTRACTS. Notwithstanding anything to the
contrary contained in the respective management contracts between The Company
and the respective owners of Eton-Cambridge, Parkway I, Parkway II, and Mound,
the respective owners of these Properties (or their authorized designee) will
have the unilateral right and option to terminate any or all of these management
contracts on sixty (60) days prior written notice to The Company. The Company
further represents, warrants, and agrees that The Company has not assigned, and
will not assign, its rights or obligations under these respective management
contracts to any other entity.
5. MISCELLANEOUS. Time is of the essence of this Agreement. This
Agreement is made in the State of Ohio and shall be governed by Ohio law. This
is the entire agreement between the parties and may not be modified or amended
except by a written document signed by the party against whom enforcement is
sought. This Agreement may be signed in more than one counterpart, in which case
each counterpart shall constitute an original of this Agreement. Paragraph
headings are for convenience only and are not intended to expand or restrict the
scope or substance of the provisions of this Agreement. Whenever used in this
Agreement, the singular shall include the plural, and pronouns shall be read as
masculine, feminine, or neuter, as the context requires. The parties further
agree that any and all disputes, claims or disagreements between the parties
arising out of or from this Agreement shall be fully and finally resolved
through mandatory and binding arbitration administered by the Cleveland, Ohio
offices of the American Arbitration Association ("AAA"). Any party to this
Agreement
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may initiate such arbitration by filing the appropriate demand for arbitration
with the AAA, and this agreement to arbitrate shall be specifically enforceable.
The prevailing party in any arbitration (or related litigation) arising out of
or from this Agreement shall be entitled to recover from the opposing party its
reasonable attorneys' fees incurred in connection with such arbitration (or
related litigation). This Agreement may not be assigned by any party without the
prior written consent of the other parties. This Agreement is binding on any and
all subsidiaries, divisions, and affiliates of the parties, and on any and all
assignees of the parties.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
day and year first written above.
/s/ Xxxx X. Xxxxxxxx
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XXXX X. XXXXXXXX
/s/ Xxxxxx X. Xxxxxxxx
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XXXXXX X. XXXXXXXX
ASSOCIATED ESTATES REALTY CORPORATION
BY: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxx his attorney in fact
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pursuant to power of attorney dated 03-11-99
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XXXXXXX X. XXXXXXXX,
AS ITS PRESIDENT
ASSOCIATED ESTATES MANAGEMENT COMPANY
BY: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxx his attorney in fact
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pursuant to power of attorney dated 03-11-99
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XXXXXXX X. XXXXXXXX,
AS ITS PRESIDENT
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